E&OE TRANSCRIPT
TV INTERVIEW
ABC 730
THURSDAY, 5 MARCH 2020
SUBJECTS: Impact of Coronavirus on the economy; Stimulus; Surplus; Interest rates; Global Financial Crisis response.
LEIGH SALES, ABC 730: Jim Chalmers, thanks for your time.
JIM CHALMERS, SHADOW TREASURER: Hi Leigh.
SALES: You've said previously that Labor would like to support the Government's stimulus package. In a nutshell, can you tell me what you think the elements are that it would need for Labor to back it?
CHALMERS: You're right, Leigh, we want to be as constructive as possible because the best outcome here is that we get Australian workers, businesses and communities through a very tough period. We'll be looking to make sure the size and speed of the package is appropriate. We'll want to know that we're getting maximum bang for buck, that workers, businesses and communities are being supported. We also want to see some of the longer-term challenges in the economy which have been apparent for some time dealt with as well.
SALES: When you say size, what do you think would be the appropriate size?
CHALMERS: I'd like to see what the Treasury advice is and I'd like to see what the Government comes forward with before we come to a concluded view. It needs to be substantial. As we've heard from the Reserve Bank and from the Treasury Secretary the impact of this Coronavirus on the economy will be significant. We don't yet know how significant but it certainly warrants a proper response from the Government which is big enough and fast enough to do the job.
SALES: Do you think that the stimulus package should include direct assistance to individual households as well as business?
CHALMERS: There's many ways you can do that, Leigh. It needs to support workers and employers and it needs to be targeted to where it can do the most good. There are a range of ways you can boost disposable income for example. We've said many times before that they should look at Newstart because every dollar of a Newstart rise would find its way into the shops and businesses of this country. That's an option to boost household disposable income. But there are other options as well in the tax system.
SALES: You were a senior adviser to the Treasurer during the Global Financial Crisis. What lessons do you think you learned, including mistakes, from that period that you think are relevant now?
CHALMERS: Australians should be really proud of what they achieved together under that Labor Government during the Global Financial Crisis in averting recession and saving hundreds of thousands of jobs, something which is admired all over the world.
SALES: It was an invitation to share some lessons, not to spread Labor's credentials.
CHALMERS: Well I think that's something that we should be proud of. Clearly no policy of that size is entirely without problems. We've expressed many times our regrets, for example what happened with pink batts -
SALES: What are your lessons though that could be applied to today?
CHALMERS: You need to get in fast enough and it needs to be substantial enough. One of the things about the early 90s recession, the last time Australia didn't avoid recession, was that the stimulus kicked in too late. We avoided that mistake in 2009 and 2010. That meant we got the assistance out the door. I’m concerned that the Government has been dragging its feet on the economy. Some of these challenges have been around for a long time. We want to make sure that the package they announce is big enough and fast enough to save jobs in the economy.
SALES: But let me ask you first principles question. I presume that you think it's a responsible economic management to sometimes run a Budget surplus and sometimes run a Budget deficit?
CHALMERS: Yes, I do.
SALES: So if the Government does go into deficit, I presume also that Labor won't complain about that, given that you yourselves ran deficits when you were in Government and you have just said that you think the economy requires a big stimulus package.
CHALMERS: We think the highest priority is to support workers, businesses and communities. That's the highest priority in economic policy.
SALES: So you won't go into a political attack on the Government if they post a deficit?
CHALMERS: The point that we make about the surplus and the deficit that they look like they're heading towards is that it's a test that they asked to be judged on. That wasn't a test that we applied to them. We didn't print the mugs. They went to the election saying, this is what you should judge us on, and they'll be judged on it.
SALES: You're making a political argument there and what I'm asking you about is if they do economically the right thing, why should you attack them for that politically?
CHALMERS: I've already answered that part of your question and said the highest priority should be supporting the economy. We've made that clear in the context of the bushfires and now that the Coronavirus is exacerbating some of the challenges that have been in the economy for some time. That's the highest priority. It is equally true when the Government spent a long time wandering around saying the Budget's 'back in the black' and the economy is 'back on track' they should pay a political price for neither of those things being true now. Consider the rhetoric that they sprayed around during the Global Financial Crisis, they should be held to the same kind of standard that they held us to.
SALES: What's your assessment as to whether the Reserve Bank will cut interest rates again?
CHALMERS: Certainly the market expects there might be one more interest rate cut. We've already had four in the last 10 months or so. They're now down at one sixth what they were during the depths of the Global Financial Crisis. So they're already extremely low, the lowest that they've ever been. The market expects that there might be one more interest rate cut in April or after that. We don't make predictions about the Reserve Bank. We don't tell them what to do. It's self-evident that a lot of the analysts are expecting one more.
SALES: Jim Chalmers thanks for your time.
CHALMERS: Thank you, Leigh.
ENDS
